Wednesday, February 9, 2011

Genting extends losses on lower volume worries

KUALA LUMPUR: GENTING BHD [] fell for the third day on Wednesday, Feb 9, down another 22 sen to RM10.52 on concerns of a possible reduced volume in its VIP customers at the Resorts World Sentosa (RWS) integrated resorts.

At 3.08pm, Genting shares fell 22 sen to RM10.52 with 7.45 million shares done.

The FBM KLCI fell 1.58 points to 1,537.97. Turnover was 1.48 billion shares valued at RM1.50 billion. Losers beat gainers 498 to 289 while 269 stocks were unchanged.

Genting's share price is down 82 sen or 7.23% since Feb 2, when it ended the half-day session at RM11.34. The markets were closed on Thursday and Friday last week for the Chinese New Year holidays.

Meanwhile, CIMB Equities Research is retaining its Outperform on its subsidiary, Genting Singapore.

'We tweak our FY10 net profit forecast after factoring in lower gross gaming revenue (GGR) following Marina Bay Sands' 4Q10 weaker-than-expected GGR growth (on the back of a 20% on-quarter decline in VIP rolling).

'We still expect Genting Singapore to clock in S$378 million EBITDA for 4Q. We keep our FY11-12 GGR assumptions as we expect the opening of new attractions at Resorts World to draw more visitors, in turn bumping up its casino patronage,' it said.

CIMB Equities Research said Genting Singapore remains an OUTPERFORM with an unchanged SOP-based target price of S$2.70.

It expects stock catalysts from: 1) a speedier ramp-up of its operations; 2) the licensing of junket operators; and 3) sustained leadership of the gaming pie in Singapore, now estimated at S$4.7 billion, down 3% from its original assumption.


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